Pages

Sunday, June 27, 2010

Congress is one step closer to a banking overhaul bill. Both houses of Congress are set to vote next week.

WASHINGTON -- Nearly two years after the American financialsystem teetered on the verge of collapse, congressionalnegotiators reached agreement early Friday morning toreconcile competing versions of the biggest overhaul offinancial regulations since the Great Depression.

A 20-hour marathon by members of a House-Senate conferencecommittee culminated at 5:39 a.m. Friday with the approval ofproposals to restrict trading by banks for their own benefitand requiring banks and their parent companies to segregatemuch of their derivatives activities.

On a party-line vote, the House conferees voted 20-11 toapprove the bill; the Senate conferees voted 7-5 to approve.The agreement cleared the way for both houses of Congress tovote on the full financial regulatory bill next week.- New York Times

So what does all this mean to you and me? Let's see what Business Week has to say.

‘Volcker Rule’

The Obama administration’s proposal to ban banks from proprietary trading, nicknamed the Volcker rule after former Federal Reserve Chairman Paul Volcker, was softened by Senate negotiators.

Banks will be allowed to invest in private-equity and hedge funds, though they will be limited to providing no more than 3 percent of the fund’s capital. Banks also can’t invest more than 3 percent of their Tier 1 capital.

Derivatives

After spending months crafting legislation, lawmakers pushed through a last-minute deal on what they termed the most challenging part of their task -- establishing for the first time a regulatory structure for the $615 trillion over-the- counter derivatives market.

The most contentious part of the derivatives rules is a provision that will force banks to push some of their swaps- trading into subsidiaries, on the theory it would reduce taxpayers’ risk if the trades are walled off from depositary institutions that enjoy federal benefits such as access to the Federal Reserve’s discount lending window.

Consumer Financial ProtectionOK, this seems to be the section that deals with us "everyday" consumers most directly. So let's see what Business Week has to say on this section of the proposed new law.

A consumer financial-protection bureau will be created at the Federal Reserve to police banks and financial-services businesses for credit-card and mortgage-lending abuses. The plan was approved over the objections of Republicans and the financial industry.

Obama originally proposed a stand-alone consumer agency, saying it would play a central role in reorganizing regulation to prevent future financial crises.

“It’s an agency with considerable authority to protect consumers from abusive financial practices, which is a landmark achievement,” Travis Plunkett, legislative director at the Consumer Federation of America, said in an interview.

While the bureau will be housed at the Fed, it will have independent authority. Led by a director appointed by the president and confirmed by the Senate, the bureau will write consumer-protection rules for banks and other firms that offer financial services or products. It will enforce those rules for banks and credit unions with more than $10 billion in assets. Bank regulators will continue examining consumer practices at smaller financial institutions.

The bureau could require credit-card lenders, including JPMorgan Chase & Co. and Citigroup Inc., to reduce interest rates and fees. Mortgage lenders, including Bank of America Corp., may be subject to tougher rules including more upfront disclosures to borrowers about loan terms.

Automobile dealers won an exemption from oversight by the bureau after lobbying from the industry. Dealers said the rules would place unnecessary restrictions on their financing business. The Obama administration had opposed the exemption.

Oh, great, in-other-words, bigger government looking over our shoulders and more federal taxes to pay for it. Ok, the bill doesn't stop there, so back to Business Week.

Credit and Debit Cards

The Federal Reserve will get authority to limit interchange, or “swipe” fees, that merchants pay for each debit-card transaction. The measure, pushed by Senator Richard Durbin, lets retailers refuse credit cards for purchases under $10 and offer discounts based on the form of payment.

The measure also directs the Fed to issue rules that let merchants route debit-card transactions on more than one network. That “provides additional competition to a previously non-competitive part of the market,” Durbin, an Illinois Democrat, said in a statement June 21.

Visa Inc. and MasterCard Inc., the world’s biggest payments networks, set interchange rates and pass that money to card- issuers including Bank of America and JPMorgan. Interchange is the largest component of the fees U.S. merchants pay to accept Visa and MasterCard debit cards. The fees totaled $19.7 billion and averaged 1.63 percent of each sale last year, according to the Nilson Report, an industry newsletter.

Ok, so this provision sounds a lot like something they had in Guernsey (Channel Islands, United Kingdom) a few years ago. I was vacationing on the island of Sark (the worlds last Feudal State, and was told when I was purchasing a small trinket, that I needed to spend at least "10 British pounds" if I wanted to swipe the credit card, I carried at the time. Back to Business Week.

Financial Stability Oversight CouncilYou thought we were done with new government agencies? Think again, there is yet another big government agency being created by this proposed bill.

The bill will establish the Financial Stability Oversight Council, a super-regulator that will monitor Wall Street’s largest firms and other market participants to spot and respond to emerging systemic risks. The Treasury Department will lead the panel, which includes regulators from other agencies.

“The idea of the council is to look at the interconnection of highly leveraged financial firms,” said Jim Hamilton, a senior law analyst at Riverwoods, Illinois-based CCH Inc., which provides information to businesses about regulatory changes. “No one was able to do that before the financial crisis.”

With a two-thirds vote, the council can impose higher capital requirements on lenders or place broker-dealers and hedge funds under the authority of the Fed. The council also will have authority to force companies to divest holdings if their structure poses a “grave threat” to U.S. financial stability.

Bank Capital Rules

The bill may force some banks to shore up capital. An amendment introduced by Senator Susan Collins, the Maine Republican who joined Democrats in voting for the broader bill, will bar bank holding companies from keeping less capital than their bank subsidiaries. That will have an impact on the use of trust preferred securities, known as TruPS. Lawmakers bowed to pressure from banks, agreeing to a transition period for large firms and grandfathering of the securities for smaller lenders.

Federal Reserve

The Federal Reserve will have a broadened supervisory scope and be subject to the most transparency in its 96-year history after negotiators rejected threats to its political autonomy and bank-oversight powers.Chairman Ben S. Bernanke will have a seat on a newly created Financial Stability Oversight Council. That board will deputize the Fed to set tougher standards for disclosure, capital and liquidity. The rules will apply to banks as well as non-bank financial companies, such as insurers, that pose risks to the financial system.

Wait a minute, broader supervisory scope, so again bigger government, which translates into more people on the government payroll. Which means even more taxes for you and I to pay for it all.

Ratings companies, including Moody’s Corp. and McGraw-Hill Cos.’ Standard & Poor’s unit, may avoid a plan to have regulators help pick which firms grade asset-backed securities. Congress also softened a proposed liability provision, making it harder for investors to sue credit raters than under language approved by the House in December.The overhaul legislation requires the SEC to conduct a two- year study on whether to create a board to decide who rates asset-backed securities. That curbed a Senate proposal to establish the board with SEC oversight. After the study, the board would be established only if regulators can’t come up with a better alternative.

Private Equity

Large hedge and private equity funds will be forced to register with the SEC, subjecting them to mandatory federal oversight for the first time. Venture capital funds were exempted from the registration rule.Hedge funds, in particular, pushed for the registration requirement, which is less burdensome than the regulations being imposed on banks. In lobbying Congress, representatives of the private pools of capital argued that they shouldn’t be heavily regulated because they didn’t cause the financial crisis. Nor were they bailed out by taxpayers.Registration subjects funds to periodic inspections by SEC examiners. Any firm with $150 million or more in assets, such as ESL Investments Inc. and Soros Fund Management, will be covered by the law. Funds also must hire a chief compliance officer and set up policies to avoid conflicts of interest.

Unwinding Failed Firms

The bill gives the FDIC, which already has authority to liquidate failed commercial banks, power to unwind large failing financial firms whose collapse would roil the economy.Regulators will have clout they lacked during the financial crisis when, instead of seizing flailing companies such as American International Group Inc., the government kept them afloat with a $700 billion taxpayer-funded bailout. Had such authority existed in September 2008, it might have been applied to Lehman Brothers Holdings Inc., whose bankruptcy that month froze credit markets and helped spur Congress to approve the Troubled Asset Relief Program.

Risk Retention

The legislation will force lenders, with the exception of some mortgage providers, to hold at least a 5 percent stake in debt they package or sell. The provision is designed to rein in the trade of easy credit blamed for fueling the financial crisis.The rule will affect credit-card debt, auto loans, mortgages and other securitized debt. Issuers of asset-backed debt and the originators who supply them with pools of loans, including credit-card companies such as Riverwoods, Illinois- based Discover Financial Services, will be forced to retain some of the credit risk. The goal is to align the issuers’ interests with those of the investors who buy their financial products.The provision will curtail lending and raise consumer costs, said Tom Deutsch, executive director of the American Securitization Forum, a New York trade group that represents issuers, investors and other participants in the market.

Fiduciary Duty

Lawmakers scrapped a proposal that would have made securities firms more accountable to individual investors. Instead, the SEC is required to study whether changes are necessary.The debate focused on whether stock brokers who offer clients investment advice should have a fiduciary duty that requires disclosure of all conflicts and restricts marketing to products that are in customers’ best interests. Currently, brokers must only ensure that a stock or bond is suitable before selling it to a client.

Insurance IndustryGuess what, this bill creates yet another federal agency. This one watch over the insurance companies. Below is what Business week had to say about this.

The bill creates a new Federal Insurance Office within the Treasury to monitor insurers, and requires a study that will recommend ways to further overhaul regulation of the industry. Industry groups say a new layer of oversight may complicate compliance and increase costs.The measures were prompted by the near-collapse of New York-based AIG in 2008. The insurer, then the world’s largest, got a $182.3 billion taxpayer bailout after failing to set aside enough money to cover obligations on credit-default swaps linked to subprime mortgages.Insurers, which are mainly regulated by states, will now have to deal with a national watchdog. State insurance commissioners are concerned federal oversight will interfere with rules already in place. Insurers are concerned that they will have to devote more resources to answer to multiple officials.“Half of our companies are farm- and county-mutual companies,” said Dylan Jones, federal affairs director of the National Association of Mutual Insurance Companies, which represents policyholder-owned carriers. “They certainly don’t have the resources to respond to federal regulatory calls.”

While I think some tighter regulation may be needed, I have to wonder, if this is overkill. Especially, when there is at least three (3) brand new agencies being created in this proposed bill. We will have to keep on eye out for the final version after the final vote this week. ---go ahead share your thoughts with me now, my ears are open. I'm always eager to hear what you think.

Wednesday, June 23, 2010

OK, so I know these headlines aren't exactly financial, but we are in the technology age. If it wasn't for technology, I wouldn't be blogging and you wouldn't be reading my blog. It's just that I thought these three articles (from this weeks news) were interesting, and would be of interest to you to.

Broadband

The Federal Communications Commission voted 3 to 2 on Thursday (June 17, 2010) to move toward giving itself the authority to regulate the transmission component of broadband Internet service, a power the commission’s majority believes is central to expanding the availability of broadband.- New York Times

So what does that mean to you and me?

The vote formally begins a period of public comment on an F.C.C. proposal to overturn a previous commission ruling that classified broadband transmission as a lightly regulated information service.

The proposal would designate broadband transmission as a telecommunications service, which, as with telephone service, would make it subject to stricter regulation.

The commission has said it intends to exempt broadband service from most of the regulatory options it has under the stricter designation, keeping only those regulations that are necessary “to implement fundamental universal service, competition and market entry, and consumer protection policies.”

AOL said on Thursday (June 17, 2010) that it sold Bebo, the struggling social networking site, to Criterion Capital Partners, a private equity fund based in Los Angeles, for a fraction of what AOL paid for the site two years ago.

The terms of the deal were not disclosed, but reports pegged its value at $10 million or less. AOL paid $850 million to a pair of British entrepreneurs for the company in March 2008.

AOL once had high hopes that Bebo would help it to regain momentum, especially with younger audiences and advertisers, and to catch other fast-growing Internet franchises. At the time, it was popular in Britain.

When it bought Bebo, the chief executive of AOL at the time, Randy Falco, called it a “game-changing acquisition” that would turn AOL into “a social media powerhouse.” AOL also had hopes Bebo would help AOL’s instant messaging service bring in revenue.

But Bebo was largely eclipsed by the continuing rise of Facebook, which has grown quickly in the United States and around the world and now has nearly 500 million members.- New York Times

Have you heard of Bebo? I don't think most of us has. I was on Bebo at one time, but did not care for it. It seem void of people to interact with. In fact it seemed deader then even MySpace which anymore is pretty dead. What do you think? Will Bebo "make a come back," and become a true competitor at least to MySpace, if not Facebook? What do you think?

Saturday, June 19, 2010

Like every Friday the past couple of years (or so), yesterday brought another bank seizure. This time though, it was only one (1) bank. That's better then the four (4) or five (5) that seems to be the standard.

On June 18, 2010, Nevada Security Bank, Reno, NV (also known as Silverado Bank, Roseville, CA), was closed by the Nevada Financial Institutions Division and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

The five branches of Nevada Security Bank (which includes the Silverado Bank, in Roseville, CA) will reopen on Monday as branches of Umpqua Bank. Depositors of Nevada Security Bank will automatically become depositors of Umpqua Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage. Customers of Nevada Security Bank should continue to use their existing branch until they receive notice from Umpqua Bank that it has completed systems changes to allow other Umpqua Bank branches to process their accounts as well.--- go ahead share your thoughts with me now, my ears are open. I'm always eager to hear what you think.

Saturday, June 12, 2010

Washington First International Bank, Seattle, Washington, was closed yesterday (June 11, 2010) by the Washington Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with East West Bank, Pasadena, California, to assume all of the deposits of Washington First International Bank.

The four branches of Washington First International Bank will reopen during normal business hours today (June 12, 2010) as branches of East West Bank. Depositors of Washington First International Bank will automatically become depositors of East West Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of Washington First International Bank should continue to use their existing branch until they receive notice from East West Bank that it has completed systems changes to allow other East West Bank branches to process their accounts as well.

Over the weekend, depositors of Washington First International Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of March 31, 2010, Washington First International Bank had approximately $520.9 million in total assets and $441.4 million in total deposits. East West Bank will pay the FDIC a premium of 0.5 percent to assume all of the deposits of Washington First International Bank. In addition to assuming all of the deposits of the failed bank, East West Bank agreed to purchase approximately $501.0 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and East West Bank entered into a loss-share transaction on $418.8 million of Washington First International Bank's assets. East West Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.

I have long hated not being able to have three columns within the blogger.com platform. Now they have that as an option, in their new design features. I believe the look is great. It is fresh, more easily readable and over all more pleasant to the eye. Have a look and see what you think.

Thursday, June 10, 2010

There are millions of Americans who at some point in their life find themselves dealing with unpaid debts that threaten to destroy any hope of financial stability in the future. Falling behind on day-to-day bills is stressful enough, however when you find yourself owing the Internal Revenue Service back taxes, the situation becomes even more grave. Creditors and lenders have resources to collect unpaid debt but when dealing with the IRS, the collection methods become even more impressive. People owing the IRS a tax liability may find themselves dealing with liens on their property or even the seizure of assets to satisfy their debt.

Fortunately there are options available to individuals that owe a tax liability that they are unable to pay in full. Here we look at a few of these options and what steps you should take to handle taxes owed to the IRS.

Request an installment agreement- While the IRS has great collection capabilities, they also know that it is better to work with a person trying to pay off back taxes than to immediately begin seizing property or garnishing wages. If you are willing and able to meet the requirements set forth in an installment agreement, you may be able to pay your tax liability in monthly installments, similar to that of other debt repayment plans. Keep in mind that the IRS will determine the minimum monthly payment and fees and penalties will continue to accrue while you are making payments.

Tax settlement- If your financial situation does not allow for regular, routine payments that would satisfy an installment agreement, the IRS might consider a settlement for less than the total amount owed. To request this, you would be required to submit an Offer in Compromise to the IRS. This process is neither simple nor without risks, therefore it is recommended anyone considering this option consult with a tax professional before moving forward.

Currently Not Collectible- This may be an option for individuals who truly have no resources to pay past due tax liabilities. Reserved for individuals who have little or no assets and minimum income, the IRS hardship rule may apply meaning collection activity is stopped. This does not however absolve you of the taxes owed, and despite the fact that collection activity is ceased, penalties and fees will continue to pile up, adding to the amount owed. The IRS will pay close attention to your earning over time to determine if and when collection activities should resume.

If you owe the IRS back taxes, the first step you may want to consider is consulting a tax professional that can help you understand the many laws and options available to you. Do not convince yourself that the situation will simply "go away" as this is one of the worst mistakes you can make. Consider what resources you have at your disposal and determine the best course of action to resolve back taxes owed to the IRS.

This article is provided for Backtaxeshelp.com, a site designed to help you pay back taxes. Owing back taxes to the IRS is stressful, and negligence will only worsen the situation. Learn how to get back tax relief.

Wednesday, June 9, 2010

Fox Business Network (FBN) canceled the two programs I watched most on their channel. One of which, you may remember that I sat down with the three co-hosts last year and interviewed them. That of course was the program called "Happy Hour," that was filmed in the Bulls and Bear Bar at the Waldorf Hotel.

Fox Business Network announced that Eric Bolling, who was a co-host on the recently canceled "Happy Hour," will get his own show, called "Money Rocks."- Huffington Post

So at least one of the three will still be with FBN, but I tended to be more interested in what the other two had to say, over what Eric said. Don't get me wrong, I supported Eric's strong conservative, Reagan-esk stance on the issues, but Cody and Rebecca were my favorites.

So what was the other show that was canceled or soon will be, and when will the new show be on? Well, I can answer both at the same time, because the new show will replace my other favorite FBN program.

"Money Rocks" will air at 8 PM, replacing a consumer-oriented call-in show hosted by Dave Ramsey. - Huffington Post

Cody Willard announced on his blog yesterday (June 8, 2010) that he would be leaving the network, effective immediately (the blog, has since been removed from the FBN servers). He was previously a Happy Hour co-host. Dave Ramsey, who previously hosted at 8pmET, obviously is gone as well.

As for the third Happy Hour co-host, Rebecca Diamond, appears to be staying with the network – she was on the air this afternoon in a contributor role.

Recently, I was reading US Banker, in which they had an article about Credit Unions.

n the ever-present competition for market share between banks and credit unions, the misfortunes of one side are usually viewed as the fortunes of the other: More restrictive membership rules for credit unions are good for banks; tougher capital requirements for banks are good for credit unions.

But the current turmoil in the credit union world—where multiple corporate credit unions are on life support and the retail credit unions that own them are anxiously watching their capital ratios—may turn out to be bad for both banks and credit unions.

The article continues by telling its readers that an estimated 2,300 Credit Unions will need "fresh capital" in the next few years. Since, there is a lack of options for raising those funds, weaker Credit Unions may be compelled by the National Credit Unions Association (NCUA) to merge with healthier ones. Consolidation is already underway. Last year, NCUA arranged 56 such mergers. However, it's not just forced mergers either. Some "healthy" Credit Unions are voluntarily choosing to merge with each other. For example two Credit Unions that I was a member of chose to merge last year. The NCUA approved the merger in October (2009), the membership of both institutions approved it in November (2009) and the deal was complete late last month (May 2010). The combined credit unions that merged selected Quest as their new name, creating the state’s fifth largest CU with $225 million in assets.

In picking the moniker, management said it sought out a brand that reflects "a search for a name that would bond the two organizations together and speak to their shared pursuit of excellent member and product service."

In an unusual twist, Quest is operating with co-presidents/CEOs, Gary Colcher and Vickie Hurt.- Credit Union Times

Vickie Hurt told the Credit Union Times that both Credit Unions were "healthy, well-capitalized and with strong membership bases, so the consolidation wasn’t required."

I tried to contact the co-presidents and ask them, if they were both healthy, why did they decide to merge. I as a member of both had encouraged a merger for several years, but I wanted to know why the boards made this decision. However, neither was available for comment before posting time.

As the Credit Unions merge and get bigger they are becoming more competitive with community banks. Community bankers say they have no problems with small credit unions that stick with serving specific member groups. They say that their problem is with the large credit unions that advertise aggressively, while enjoying a tax advantage over banks.

"We see the credit unions we are competing against already being very competitive across all the products we offer as a community bank," says Robert R. Jones 3rd, president of United Bank in Mobile, Ala. "If they are going to get to a certain size, the viability of the credit union charter needs to be reconsidered."

I personally think it's good that Credit Unions are taking care of themselves and shaking out the weak among themselves. It is important that we as the consumers of financial products that we place our trust in strong, viable financial institutions. No mater if they be Credit Unions, Banks or Savings and Loans. ---go ahead share your thoughts with me now, my ears are open. I'm always eager to hear what you think. Sponsor This Post(via PayPal) and Replace This Text. follow me on Twitter

TierOne Bank, Lincoln, Nebraska, was closed Friday, June 4, 2010, by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Great Western Bank, Sioux Falls, South Dakota, to assume all of the deposits of TierOne Bank.

The 69 branches of TierOne Bank will reopen during normal business hours beginning Saturday as branches of Great Western Bank. Depositors of TierOne Bank will automatically become depositors of Great Western Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of TierOne Bank should continue to use their existing branch until they receive notice from Great Western Bank that it has completed systems changes to allow other Great Western Bank branches to process their accounts as well.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $297.8 million. Great Western Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. TierOne Bank is the 81st FDIC-insured institution to fail in the nation this year, and the first in Nebraska. The last FDIC-insured institution closed in the state was Sherman County Bank, Loup City, on February 13, 2009.

The Federal Deposit Insurance Corporation (FDIC) approved the payout of the insured deposits of Arcola Homestead Savings Bank, Arcola, Illinois. The bank was closed Friday, June 4, 2010, by the Illinois Department of Financial Professional Regulation – Division of Banking, which appointed the FDIC as receiver.

The FDIC was unable to find another financial institution to take over the banking operations of Arcola Homestead Savings Bank. As a result, checks to the retail depositors for their insured funds will be mailed on Monday. Brokered deposits will be wired once brokers provide the FDIC with the necessary documents to determine if any of their clients exceed the insurance limits. Customers who placed money with brokers should contact them directly for more information about the status of their funds.

On Monday, the FDIC will mail checks to customers for their insured funds in savings accounts, IRAs and certificates of deposit (CDs). As a convenience to local depositors, the FDIC has made arrangements for the insured funds in checking, NOW and Money Market accounts to be transferred to the Arcola branch of First Mid-Illinois Bank & Trust, National Association, located at 249 W. Springfield Road. Customers will have access to their checking, NOW and Money Market account funds at this branch between Monday, June 7 and Saturday, June 12. It is important to note, however, that customers of Arcola Homestead Savings Bank will no longer be able to write checks and must come in person to either claim their money or set up a new account. After June 12, the FDIC will mail any remaining funds to the owner of these accounts.

As of March 31, 2010, Arcola Homestead Savings Bank had approximately $17.0 million in total assets and $18.1 million in total deposits. At the time of closing, there did not appear to be any uninsured funds.

First National Bank, Rosedale, Mississippi, was closed Friday, June 4, 2010, by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The Jefferson Bank, Fayette, Mississippi, to assume all of the deposits of First National Bank.

The sole branch of First National Bank will reopen on Monday as a branch of The Jefferson Bank. Depositors of First National Bank will automatically become depositors of The Jefferson Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of First National Bank should continue to use their existing branch until they receive notice from The Jefferson Bank that it has completed systems changes to allow other The Jefferson Bank branches to process their accounts as well.

This evening and over the weekend, depositors of First National Bank can access their money by writing checks. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of March 31, 2010, First National Bank had approximately $60.4 million in total assets and $63.5 million in total deposits. The Jefferson Bank did not pay the FDIC a premium for the deposits of First National Bank. In addition to assuming all of the deposits of the failed bank, The Jefferson Bank agreed to purchase essentially all of the assets.

Tuesday, June 1, 2010

There has been some debate about the amount of tax paid in Texas versus other states (like Kansas) that taxes everything under the sun. So I thought, I would do a little research and see what I can figure up.

First lets look at sales tax, Kansas State Sales Tax (includes groceries): 5.3% (6.3% after July 1, 2010) (prescription drugs exempt); Cities and counties may add another 3%. In the city of Topeka, where I live the city and county sales tax means I pay a total sales tax of 7.95% (8.96% after July 1, 2010). (Residents with income less than $30,300 and meet other qualifications can receive a sales tax refund on food, when they file their income tax).

Now lets look at Sales Tax in the state of Texas, where the sales tax is 6.25% (groceries/non-prepared food, prescription and non-prescription drugs exempt); local option taxes can raise the rate to 8.25%. Since groceries are exempt, that is the biggest thing I spend most of my money on, so that in of itself will save me lots of money. True, I will be paying over 8% when I purchase furniture and other big items, but same is true here in Topeka after July 1, so actually even with that I will be paying less in Texas.

Now what about the Gasoline Tax, here in Kansas it is 25 cents/gallon, whereas in Texas it is 20 cents/gallon. I don't use Diesel but Kansas charges 27 cents/gallon, whereas Texas only charges 20 cents/gallon. Again, it is cheaper in Texas then in Kansas.

Another item that is taxed in both states is Cigarettes. Kansas the Cigarette Tax is 79 cents/pack of 20. While in Texas, the Cigarette Tax is a whopping $1.41/pack of 20. Though I don't smoke, my fiance does have an occasional cigarette.

Now for personal income tax. In Kansas the state income tax range is from 3.5%-6.45% With income brackets ranging from $15,000-$30,000. There 3 different brackets in Kansas' income tax system and the exemptions are as follows:

Whereas in Texas, I will be able to keep my money, as there is no No state personal income tax.

No lets move to property taxes. That is where so many people believe Texas will be more expensive. So lets, just look at the real facts.

First we will start with the Inheritance and Estate Taxes, after 2009 the so called inheritance taxes has expired. So as of now, there is no such tax in Kansas. Which is also true for the state of Texas.

Then there is (Real Estate) Property Taxes. In Kansas property tax varies by local areas (as it does in every state), but the average is 1.25% of your home value. Meaning the average home in Kansas is worth $125,700 and would see an annual tax bill of $1,569. Whereas in Texas, there is no statewide property tax, but every local government body (city, county and school) will have property tax. The average tax rate is 1.76%. The average home value in Texas is $126,800, meaning the annual tax on that home would be $2,232. Real Property figures from MSN

All property is appraised at full market value, and taxes are assessed by local county assessors on 100% of appraised value. The total tax rate is the sum of the rates of all applicable taxing units including cities, counties, schools, and special districts. Therefore, looking at Austin, since that's where I'm heading the property tax rate is 2.2064%, according to the Austin Chamber of Commerce.

Then there is more tax that falls under property tax, and that is the Personal Property Tax. That is the annual tax some states charge on the value of you vehicle. Again this property tax varies by county as well as the value of your car or truck. I am not sure what the percentage is, but my fiance pays about $100/year for her 1999 Subaru for the taxes and registration. I pay around $200 for my 2004 Chevy. In Texas, there is no personal property tax, but according to HS who lives down there,

yearly $120 for registration and inspection fee

. There is also a 6.5% sales tax, when you purchase the car. However, that is only one time.

With an additional $11.50 collected by Travis County (where Austin is located). Then as HS said there is the required inspections, that are not required here in Kansas. The registration fees for light trucks go by weight and as such are not figured here, but you can see those rates, on the chart provide by the TDOT.

So overall, it would appear that as I had figured previously, I would be paying less taxes in Texas, though maybe not as much as one would think, without actually setting down and running the numbers, as I did for this post.

Thank You

Finance

We have been in the title loans industry for over 4 years and have helped people get out of tight situations, ranging from hospital bills to starting new businesses. We are here to help you get the money you need until you can get yourself back on track.